Insurer WellPoint's 3Q net income edges higher

TOM MURPHY AP Business Writer Published:

INDIANAPOLIS (AP) -- WellPoint Inc.'s third-quarter net income inched up 1 percent, as the nation's second largest health insurer trimmed expenses to balance flat revenue and an enrollment decline.

The earnings topped Wall Street estimates and the Indianapolis-based company reaffirmed its forecast for 2012 earnings on Wednesday.

In the three months ended Sept. 30, WellPoint earned $691.2 million, or $2.15 per share. That's up from $683.2 million, or $1.90 per share, a year ago.

Excluding investment gains, adjusted earnings were $2.09 per share, which trumped Wall Street expectations.

Analysts expected $1.83 per share, according to FactSet.

The insurer's revenue, also excluding investments, was $15.13 billion, which fell short of analyst expectations for $15.3 billion in revenue.

WellPoint said its enrollment slid more than 2 percent to about 33.5 million people compared to last year. Losses in individual and employer-sponsored health coverage more than offset gains the insurer made in its Medicaid and Medicare businesses.

The insurer also said it paid nearly $12 billion in medical claims, a slight drop from last year's quarter, and selling, general and administrative expenses fell 2 percent to $2.08 billion.

The company operates Blue Cross Blue Shield plans in 14 states, including California, New York and Ohio.

WellPoint had not recorded a quarterly increase in earnings compared to the previous year since the first quarter of 2011, and the insurer's performance had frustrated several large shareholders. Chairwoman and CEO Angela Braly abruptly resigned with about a month left in the third quarter, and the company named John Cannon, its executive vice president and general counsel, to serve as interim CEO.

In July, WellPoint reported second-quarter results that missed Wall Street expectations and lowered its 2012 forecast to adjusted earnings ranging from $7.30 to $7.40 per share. It reaffirmed that forecast on Wednesday.

Analysts expect, on average, earnings of $7.38 per share.

Its shares finished at $61.20 per share on Tuesday. They are up almost 17 percent from their 52-week low of $52.52 in late July.